A.B.N. 88 000 014 675
26 August 2008
The Manager Companies
Australian Securities Exchange
Company Announcements Office
Level 4 50 Bridge Street
Sydney NSW 2000
Dear Sir
Re:
WOOLWORTHS LIMITED PRELIMINARY FINAL REPORT - LISTING RULE 4.3A
The Preliminary Final Report / Appendix 4E for the year ending 29 June 2008 is attached.
For and on Behalf of
WOOLWORTHS LIMITED
PETER J HORTON
COMPANY SECRETARY
1 Woolworths Way, Bella Vista, NSW 2153 PO Box 8000, Baulkham Hills, NSW 2153 Australia
Telephone (02) 8885 0000 Facsimile (02) 8888 0001
Preliminary Final Report of Woolworths
Limited for the Financial Year Ended
29 June 2008
ACN 88 000 014 675
This Preliminary Final Report is provided to the Australian Stock
Exchange (ASX) under ASX Listing Rule 4.3A.
Current Reporting Period:
Financial Year ended 29 June 2008 (53 weeks)
Previous Corresponding Period:
Financial Year ended 24 June 2007 (52 weeks)
Woolworths Limited
Results For Announcement To The Market
for the Financial Year Ended 29 June 2008
Revenue and Net Profit/(Loss)
Percentage
Change
Amount
%
$M
Revenue from ordinary activities
up
10.7%
to
47,287.7
Profit/(loss) from ordinary activities after tax
up
25.7%
to
1,626.8
up
25.7%
to
1,626.8
attributable to members
Net profit/(loss) attributable to members
Dividends (Distributions)
Franked
Amount per
amount per
security
security
Final dividend
48¢
48¢
Interim dividend
44¢
44¢
Record date for determining entitlements to the
Final Dividend: 5 September 2008
dividend:
Brief Explanation of Revenue, Net Profit/(Loss) and Dividends (Distributions)
Refer to press release
1
Woolworths Limited
Income Statement
for the Financial Year Ended 29 June 2008
2008
2007
$m
$m
47,034.8
42,477.1
123.3
109.7
47,158.1
42,586.8
Cost of sales
(35,257.8)
(31,832.8)
Gross profit
11,900.3
10,754.0
Other revenue
129.6
140.0
Other income
34.4
-
Branch expenses
(7,330.5)
(6,781.2)
Administration expenses
(2,205.0)
(2,001.5)
Earnings before interest and tax
2,528.8
2,111.3
Financial expense
(230.8)
(262.0)
Financial income
39.5
28.4
2,337.5
1,877.7
Income tax expense
(686.0)
(566.4)
Net profit after income tax expense
1,651.5
1,311.3
(24.7)
(17.3)
1,626.8
1,294.0
Note
Revenue from sales of goods
Other operating revenue
Total revenue from operations
Net profit before income tax expense
2
Net profit attributable to minority interests
Net profit attributable to members of Woolworths
Limited
2
Woolworths Limited
Balance Sheet
as at 29 June 2008
Note
2008
$m
2007
$m
Current assets
Cash
Trade and other receivables
Inventories
Assets held for sale
Other financial assets
754.6
637.8
3,010.0
34.7
65.1
798.8
484.7
2,739.2
96.9
41.4
Total current assets
4,502.2
4,161.0
Non-current assets
Trade and other receivables
Other financial assets
Property, plant and equipment
Intangibles
Deferred tax assets
3.6
262.0
5,638.8
4,835.2
430.7
5.4
256.0
4,623.0
5,003.5
367.2
Total non-current assets
11,170.3
10,255.1
Total assets
15,672.5
14,416.1
Current liabilities
Trade and other payables
Borrowings
Other financial liabilities
Current tax liabilities
Provisions
4,804.9
550.2
61.9
330.2
677.2
4,184.7
379.8
74.9
212.9
650.5
Total current liabilities
6,424.4
5,502.8
Non-current liabilities
Borrowings
Other financial liabilities
Provisions
Other
2,224.0
274.7
380.0
134.1
2,690.9
227.2
382.3
98.2
Total non-current liabilities
3,012.8
3,398.6
Total liabilities
9,437.2
8,901.4
Net assets
6,235.3
5,514.7
Equity
Contributed equity
Shares held in trust
Reserves
Retained profits
3,627.1
(60.0)
(133.9)
2,559.7
3,422.7
(71.6)
(38.3)
1,962.5
Equity attributable to the members of Woolworths Limited
Minority shareholders equity
5,992.9
242.4
5,275.3
239.4
Total equity
6,235.3
5,514.7
5
3
Woolworths Limited
Statement of Cash Flows
for the Financial Year Ended 29 June 2008
2008
2007
$m
$m
50,347.4
46,021.5
36.5
35.8
(46,940.5)
(42,990.9)
(236.7)
(273.5)
Interest received
21.2
23.7
Income tax paid
(573.9)
(522.4)
2,654.0
2,294.2
228.4
778.2
(1,733.6)
(1,113.4)
Payments for the purchase of intangibles
(14.5)
(17.6)
Payment for purchase of investments
(57.3)
(173.0)
14.7
4.7
(191.1)
(204.0)
(1,753.4)
(725.1)
63.3
47.4
Proceeds from external borrowings
5,916.1
10,097.1
Repayment of external borrowings
(6,048.3)
(11,096.6)
(862.5)
(355.2)
(14.3)
(7.7)
Repayment of employee share plan loans
8.9
16.2
Net cash provided by financing activities
(936.8)
(1,298.8)
(36.2)
270.3
(8.0)
2.6
798.8
525.9
754.6
798.8
Note
Cash Flows From Operating Activities
Receipts from customers
Receipts from vendors and tenants
Payments to suppliers and employees
Interest and costs of finance paid
Net cash provided by operating activities
6(f)
Cash Flows From Investing Activities
Proceeds from the sale of property, plant and equipment
Payments for property, plant and equipment
Dividend received
Payments for purchase of businesses
6(b)
Net cash used in investing activities
Cash Flows From Financing Activities
Proceeds from issue of equity securities
Dividends paid
Dividends paid to minority interest
Net Increase In Cash Held
Effect of exchange rate changes on foreign currency
held
Cash At The Beginning Of The Financial Year
Cash At The End Of The Financial Year
6(a)
4
Woolworths Limited
Statement of Recognised Income and Expense
for the Financial Year Ended 29 June 2008
2008
2007
$m
$m
(304.7)
190.0
(54.0)
(11.8)
5.1
(161.5)
(39.7)
(7.4)
64.7
(17.2)
(328.6)
(7.9)
156.7
236.0
1,651.5
1,311.3
1,479.6
1,539.4
1,454.9
1,522.1
24.7
17.3
1,479.6
1,539.4
Movement in translation of foreign operations
taken to equity
Movement in the fair value of available-for-sale
assets
Movement in the fair value of cash flow hedges
(1)
Actuarial losses on defined benefit plans
Tax effect of items recognised directly in equity
Net income/(expense) recognised directly in
equity
Transfer to profit and loss on cash flow hedges (2)
Profit for the period
Total recognised income and expense for the
period
Attributable to:
Equity holders of the parent
Minority interest
Total recognised income and expense for the
period
(1)
(2)
Represents the change in fair value of financial instruments entered into to hedge risks associated with our USD denominated debt.
As the financial instruments meet the required “hedge effectiveness tests” an amount equal to the exchange movement on the USD
debt is transferred from reserves to the profit and loss.
5
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
Note
Contents
1
Basis of Preparation
2
Profit from Ordinary Activities
3
Commentary on Results
4
Sales of Assets
5
Retained Profits
6
Notes to the Statement of Cash Flows
7
Details relating to Dividends (Distributions)
8
Earnings Per Share
9
Net Tangible Assets per Security
10
Contingent Liabilities and Contingent Assets
11
Segment Information
12
Discontinuing Operations
13
Other Significant Information
14
Information on Audit or Review
Attachments
1. Segment Note
2. Share Movements Schedule
6
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
1. Basis of Preparation
This preliminary final report has been prepared in accordance with ASX Listing Rule 4.3A and
the disclosure requirements of ASX Appendix 4E.
The accounting policies adopted in the preparation of the preliminary final report are consistent
with those adopted and disclosed in the 2007 annual financial report except where detailed
below.
Details of new accounting policy:
Not applicable
2008
2007
$m
$m
47,034.8
42,477.1
Other operating revenue
123.3
109.7
Total operating revenue
47,158.1
42,586.8
129.6
140.0
47,287.7
42,726.8
2. Profit From Ordinary Activities
Profit from ordinary activities before income tax
includes the following items of revenue and expense:
(a) Operating revenue
Revenue from the sale of goods
(b) Other revenue from ordinary activities
Rent and other
Total revenue (excluding financial income)
7
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
(c)
2008
2007
$m
$m
4.6
2.3
110.8
101.7
12.3
20.4
559.6
496.9
78.2
72.0
650.1
589.3
5,542.2
4,959.8
1,223.3
1,121.1
92.6
85.2
1,315.9
1,206.3
Expenses
Amounts provided for:
Bad and doubtful debts
Self-insured risks
Depreciation:
Buildings
Plant and equipment, fixtures and fittings
Amortisation:
Leasehold improvements
Total depreciation and amortisation
Employee benefits expense
Operating lease rental expenses:
- minimum lease payments
- contingent rentals
Total operating lease rental expenses
(d)
Individually significant non-recurring items
None
8
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
2. Profit/(Loss) From Ordinary Activities (continued)
(e)
Revision of Accounting Estimates
Details of the nature and amount of revisions of accounting estimates:
None
3. Commentary on Results
Refer to Press Release
9
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
2008
2007
$m
$m
34.4
(12.7)
1,962.5
1,455.7
1,626.8
1,294.0
(27.8)
(5.2)
(1,006.4)
(788.9)
4.6
6.9
2,559.7
1,962.5
4. Sales of Assets
Sales of assets in the ordinary course of business
have given rise to the following:
Net Profit/(Loss)
Property, plant and equipment
5. Retained Profits
Balance at beginning of the financial year
Net profit attributable to the members of
Woolworths Limited
Defined benefit actuarial gain/(loss) recognised in
equity (net of tax)
Dividends paid
Other
Balance at end of financial year
10
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
2008
$m
2007
$m
754.6
798.8
754.6
798.8
Property, plant and equipment
Inventories
Liquor, gaming licenses, property rights
Cash
Other assets
Provisions
Net assets acquired
99.5
2.7
52.8
0.2
1.4
(0.2)
156.4
113.6
4.4
50.1
0.3
4.8
(1.5)
171.7
Goodwill on acquisition
34.9
191.3
32.6
204.3
191.3
191.3
204.3
204.3
191.3
(0.2)
191.1
204.3
(0.3)
204.0
6. Notes to the Statement of Cash Flows
(a) Reconciliation of Cash
For the purposes of the statement of cash flows,
cash includes cash on hand and in banks and
investments in money market instruments, net of
outstanding bank overdrafts. Cash at the end of
the financial year as shown in the statement of
cash flows is reconciled to the related items in
the statement of financial position as follows:
Cash
(b) Businesses Acquired
Details of the aggregate cash outflow relating to
the acquisition of businesses and the aggregate
assets and liabilities of those businesses at the
date of acquisition were as follows:
Fair Value of Net Assets Acquired
Analysed as follows:
Consideration - cash
Consideration – cash
Less: Cash balances acquired
Net Cash Outflow on Acquisition
11
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
6. Notes to the Statement of Cash Flows (continued)
(c) Non-Cash Financing and Investing Activities
In accordance with the Company’s Dividend Reinvestment Plan (DRP) $143.9m of the total
dividend of $1,006.4m (14%) was reinvested in the shares of the Company (2007: $433.7m
of total dividend of $788.9m, 55%).
(d) Financing Facilities
Unrestricted access was available at balance date to the
following lines of credit:
Total facilities
Bank overdrafts
Bank loan facilities
2008
2007
$m
$m
30.6
25.7
2,511.3
2,575.2
2,541.9
2,600.9
0.4
-
250.1
115.6
250.5
115.6
30.2
25.7
2,261.2
2,459.6
2,291.4
2,485.3
Used at balance date
Bank overdrafts
Bank loan facilities
Unused at balance date
Bank overdrafts
Bank loan facilities
(e) Cash Balances Not Available for Use
Not Applicable
12
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
2008
2007
$m
$m
1,651.5
1,311.3
650.1
589.3
3.7
1.5
Foreign exchange (gains)/losses
(3.8)
4.4
Share based options expense
48.5
17.0
Decrease in defined benefit plan liability
(9.9)
(8.7)
(34.4)
12.7
Borrowing costs capitalised
(4.4)
(3.1)
(Increase)/decrease in deferred tax asset
(3.7)
(47.4)
115.9
91.3
(Increase)/decrease in receivables
(154.7)
(6.4)
(Increase)/decrease in inventories
(303.4)
(399.2)
644.8
467.3
68.5
268.9
(14.7)
(4.7)
2,654.0
2,294.2
6. Notes to the Statement of Cash Flows (continued)
(f) Reconciliation of Profit From Ordinary
Activities After Related Income Tax to Net
Cash Provided by Operating Activities
Net profit after income tax
Depreciation and amortisation
Impairment of receivables
(Profit)/Loss on sale of property, plant and
equipment
Increase/(decrease) in income tax payable
Increase/(decrease) in payables
Increase/(decrease) in sundry payables and
provisions
Dividends Received
Net cash provided by operating activities
13
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
7. Details Relating to Dividends (Distributions)
Amount per
security of
foreign
Final dividend
2008
2007
Interim dividend
2008
2007
Total
Amount per
sourced
Date dividend
security
dividend
payable
¢
¢
rd
48
th
39
3 October 08
5 October 07
th
44
th
35
24 April 08
27 April 07
2008
-
92
2007
-
74
Total dividend (distribution) per security (interim plus final)
2008
2007
¢
¢
Ordinary securities (each class separately)
92
74
Preference securities (each class separately)
Nil
Nil
Other equity instruments (each class separately)
Nil
Nil
Interim and final dividend (distribution) on all securities
Ordinary securities (each class separately)
2008
2007
$m
$m
1,006.4
788.9
Preference securities (each class separately)
Nil
Nil
Other equity instruments (each class separately)
Nil
Nil
-
-
1,006.4
788.9
Special Dividend (see below)
Total
Any other disclosures in relation to dividends (distributions).
Not Applicable
14
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
7. Details Relating to Dividends/(Distributions) (continued)
Dividend Reinvestment Plans
The dividend or distribution plans shown below are in operation.
Dividend Reinvestment Plan (The Plan)
Eligible shareholders may elect to participate in The Plan in respect to all or part of their
shareholding, subject to any maximum and/or minimum number of shares to participate in The Plan
that the Directors may specify. There is currently a limit on DRP participation of 20,000 shares
which is applicable to the final dividend payable on 3 October 2008. (Applicable to final dividend
2007 paid on 5 October 2007, and interim dividend 2008 paid on 24 April 2008).
The last date(s) for receipt of election notices for the dividend
or distribution plans
5 September 2008
15
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
8. Earnings Per Share
2008
2007
¢ per share
¢ per share
Basic EPS
134.89
108.79
Diluted EPS
133.55
107.85
Basic Earnings per Share
The earnings and weighted average number of ordinary
shares used in the calculation of basic earnings per share are
as follows:
Earnings (a)
Weighted average number of ordinary shares (b)
16
2008
2007
$m
$m
1,626.8
1,294.0
2008
2007
No. m
No. m
1,206.0
1,189.4
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
8. Earnings Per Share (continued)
(a) Earnings used in the calculation of basic earnings per share reconciles to net profit in the
statement of financial performance as follows:
2008
2007
$m
$m
Woolworths Limited
1,626.8
1,294.0
Earnings used in the calculation of basic EPS
1,626.8
1,294.0
Operating net profit attributable to the members of
(b) Options are considered to be potential ordinary shares and are therefore excluded from the
weighted average number of ordinary shares used in the calculation of basic earnings per share.
Where dilutive, potential ordinary shares are included in the calculation of diluted earnings per
share (refer below).
Diluted Earnings per Share
The earnings and weighted average number of ordinary and
potential ordinary shares used in the calculation of diluted
earnings per share are as follows:
Earnings (a)
2008
2007
$m
$m
1,626.8
1,294.0
1,218.1
1,199.8
Weighted average number of ordinary shares and potential
ordinary shares (b), (c), (d)
17
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
8. Earnings Per Share (continued)
(a) Earnings used in the calculation of diluted earnings per share reconciles to net profit in the
statement of financial performance as follows:
2008
2007
$m
$m
Woolworths Limited
1,626.8
1,294.0
Earnings used in the calculation of diluted EPS
1,626.8
1,294.0
Operating net profit attributable to the members of
(b) Weighted average number of ordinary shares and potential ordinary shares used in the
calculation of diluted earnings per share reconciles to the weighted average number of ordinary
shares used in the calculation of basic earnings per share as follows:
2008
2007
No. m
No. m
Weighted average number of ordinary shares used in the
calculation of basic EPS
1,206.0
1,189.4
12.1
10.4
1,218.1
1,199.8
Shares deemed to be issued for no consideration in
respect of employee options
Weighted average number of ordinary shares and
potential ordinary shares used in the calculation of
diluted EPS
18
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
8. Earnings Per Share (continued)
(c) The following potential ordinary shares are not dilutive and are therefore excluded from the
weighted average number of ordinary shares and potential ordinary shares used in the
calculation of diluted earnings per share:
2008
2007
No. m
No. m
Shares deemed to be issued at average market price in
respect of employee options
22.1
19.6
22.1
19.6
(d) Weighted average number of converted, lapsed, or cancelled potential ordinary shares used in
the calculation of diluted earnings per share:
2008
2007
No. ‘000
No. ’000
-
-
Not applicable
9. Net Tangible Assets Per Security
Net tangible assets per security
2008
2007
¢ per share
¢ per share
95.64
22.66
156.45
154.02
252.09
176.68
Add:
Brand names, licenses and property development rights
Net tangible assets per security adjusted for brand
names, licenses and property development rights
19
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
10. Contingent Liabilities and Contingent Assets
2008
2007
$’000
$’000
51.6
55.7
425.9
363.0
11.2
29.9
488.7
448.6
Contingent liabilities
Trading guarantees
Workers’ compensation self-insurance guarantees
Outstanding letters of credit issued to suppliers
Contingent assets
None
11. Segment Information
Refer to Attachment 1
12. Discontinuing Operations
Not applicable
20
Woolworths Limited
Notes to the Preliminary Final Report
for the Financial Year Ended 29 June 2008
13. Other Significant Information
Attachment 1 – Segment Note
Attachment 2 – Share Movements Schedule
14. Information on Audit or Review
This preliminary final report is based on accounts to which one of the following applies.
The accounts have been audited.
The accounts have been subject
to review.
9
The accounts are in the process of being
The accounts have not yet been
audited or subject to review.
audited or reviewed.
Description of likely dispute or qualification if the accounts have not yet been audited or subject to
review or are in the process of being audited or subjected to review.
Not Applicable
Description of dispute or qualification if the accounts have been audited or subjected to review.
Not Applicable
21
Attachment 1
Consumer
(3)
(4)
Consolidated
Hotels
Wholesale
(2)
Electronics
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
2008
2007
$A million $A million $A million $A million $A million $A million $A million $A million $A million $A million $A million $A million
Supermarkets
(1)
BIG W
Segment disclosures
Business segments
Business segments
Sales to customers
Other operating revenue
Inter-segment revenue
Segment revenue
Eliminations
40,312.8
123.3
36,521.8
109.7
-
40,436.1
Unallocated revenue/(expenses)
3,915.9
-
36,631.5
3,465.2
-
3,915.9
1,530.6
-
3,465.2
1,310.2
-
0.4
1,531.0
1,113.4
-
0.3
1,310.5
1,032.1
-
1,113.4
162.1
-
1,032.1
147.8
-
264.2
426.3
235.3
383.1
(5)
Total revenue
Segment result before tax
2,164.8
Unallocated revenue/(expenses) - Property
- Head Office
Net financing cost
1,835.1
161.2
138.6
63.1
66.8
215.1
183.7
4.3
2.5
(6)
(6)
Profit before tax
Income tax expense
Profit after tax
Segment assets
Unallocated
8,776.3
8,061.0
1,152.5
996.8
498.6
479.6
2,893.8
2,590.9
57.6
49.5
(7)
Total Assets
Segment liabilities
Unallocated
3,663.2
3,337.7
597.2
511.0
150.6
132.6
149.2
140.4
45.6
38.6
(7)
Total Liabilities
Capital expenditure
1,148.3
680.6
152.9
103.4
36.2
36.4
333.4
247.9
1.7
1.2
(7)
Unallocated
Acquisition of Assets
Segment depreciation and amortisation
Unallocated
467.2
412.8
55.0
47.9
25.7
24.4
57.8
55.6
1.4
1.4
(7)
Total depreciation and amortisation
Segment other non cash expenses
Unallocated
29.1
11.5
4.6
2.0
1.5
0.4
2.2
0.2
-
(8)
Total other non cash expenses
(1) Supermarkets comprise supermarket stores, liquor stores and petrol canopies in Australia and New Zealand.
(2) Consumer Electronics includes Woolworths Wholesale India.
(3) Hotels comprise on-premise liquor sales, food, accommodation, gaming and venue hire.
(4) Wholesale comprises Statewide Independent Wholesalers (SIW).
(5) Unallocated revenue comprise rent and other revenue from operating activities.
(6) 2008 includes other significant items including the profit on sale of certain properties ($49.7m) and the costs associated with certain key stategic initiatives ($21.1m).
(7) Unallocated comprise corporate head office and property division.
(8) Includes non cash transactions including the defined benefit liability movement, employee shares scheme expenses and unrealised foreign exchange losses.
-
47,034.8
123.3
264.6
47,422.7
(264.6)
42,477.1
109.7
235.6
42,822.4
(235.6)
129.6
140.0
47,287.7
42,726.8
2,608.5
2,226.7
33.1
(23.8)
(112.8)
(191.3)
(91.6)
(233.6)
2,337.5
(686.0)
1,651.5
1,877.7
(566.4)
1,311.3
13,378.8
12,177.8
2,293.7
2,238.3
15,672.5
14,416.1
4,605.8
4,160.3
4,831.4
4,741.1
9,437.2
8,901.4
1,672.5
1,069.4
269.2
1,941.7
257.8
1,327.2
607.1
542.1
43.0
47.2
650.1
589.3
37.4
14.1
115.1
99.4
152.5
113.5
Attachment 1
Australia
2008
2007
$A million
$A million
New Zealand
2008
2007
$A million
$A million
Consolidated
2008
2007
$A million
$A million
Segment disclosures
Geographical segments
Sales to customers
Other revenue
Segment revenue
Segment assets
Capital expenditure
42,571.2
363.8
42,935.0
10,733.2
1,482.2
38,272.6
339.4
38,612.0
9,293.1
1,012.4
4,463.6
24.1
4,487.7
2,645.6
190.3
4,204.5
5.9
4,210.4
2,884.7
57.0
47,034.8
387.9
47,422.7
13,378.8
1,672.5
42,477.1
345.3
42,822.4
12,177.8
1,069.4
ATTACHMENT 2
Ordinary securities movements through issues of shares
Date
16/07/2007
23/07/2007
6/08/2007
13/08/2007
20/08/2007
20/08/2007
27/08/2007
27/08/2007
27/08/2007
3/09/2007
3/09/2007
6/09/2007
10/09/2007
10/09/2007
10/09/2007
17/09/2007
24/09/2007
24/09/2007
24/09/2007
2/10/2007
2/10/2007
5/10/2007
8/10/2007
15/10/2007
15/10/2007
22/10/2007
22/10/2007
29/10/2007
29/10/2007
29/10/2007
5/11/2007
12/11/2007
19/11/2007
19/11/2007
26/11/2007
3/12/2007
3/12/2007
10/12/2007
10/12/2007
14/12/2007
14/12/2007
24/12/2007
24/12/2007
24/12/2007
28/12/2007
14/01/2008
21/01/2008
21/01/2008
18/02/2008
10/03/2008
10/03/2008
17/03/2008
25/03/2008
31/03/2008
24/04/2008
10/06/2008
No of Shares
2,000
70,000
70,000
45,600
70,000
226,160
55,500
689,700
1,500
239,400
1,203,040
152,000
114,350
448,400
1,500
134,960
77,200
226,230
1,000
14,150
129,200
2,264,497
22,800
20,000
22,800
25,000
15,200
50,650
30,400
1,000
7,600
7,600
12,500
45,600
45,600
5,000
219,450
87,500
53,200
129,200
3,000
184,400
1,000
13,200
30,400
750
750
3,000
750
17,500
750
17,500
2,250
6,250
2,534,600
2,000
9,855,587
Exercise/Issue Price
12.94
10.89
10.89
12.94
10.89
12.94
10.89
12.94
12.60
10.89
12.84
12.94
10.89
12.94
12.60
12.94
10.89
12.94
12.60
10.89
12.94
29.82
12.94
10.89
12.94
6.17
12.94
10.89
12.94
12.60
12.94
12.94
5.11
12.94
12.94
5.11
12.94
10.89
12.94
12.94
12.60
12.94
12.60
12.94
12.94
12.60
12.60
12.60
12.60
10.89
12.60
10.89
12.60
10.89
30.08
12.60
(a)
(a) Note that this excludes 1,299,413 shares issued under the employee share plan (Treasury Shares)
26 August 2008
PRESS RELEASE
FINAL PROFIT REPORT AND DIVIDEND ANNOUNCEMENT FOR
THE 53 WEEKS ENDED 29 JUNE 2008
NET PROFIT AFTER TAX UP 25.7% TO $1,626.8 MILLION
•
10.7% INCREASE IN SALES TO $47.0 BILLION
•
19.8% INCREASE IN EARNINGS BEFORE INTEREST AND TAX TO $2,528.8 MILLION
•
25.7% INCREASE IN NET PROFIT AFTER TAX TO $1,626.8 MILLION
•
24.0% INCREASE IN EARNINGS PER SHARE TO 134.9 CENTS
•
24.3% INCREASE IN DIVIDEND PER SHARE TO 92 CENTS
•
43 BASIS POINTS REDUCTION IN COST OF DOING BUSINESS
LONG-TERM INVESTMENT IN WORLD-CLASS DISTRIBUTION, LOGISTICS SYSTEMS AND STORE
REFURBISHMENTS CONTINUES TO PAY STRONG DIVIDENDS
CONSUMERS BENEFIT FROM CONTINUED REDUCTIONS IN PRICES, INCREASED RANGING AND
CATEGORIES, GREATER CONVENIENCE AND IN-STORE EXPERIENCE
INITIATIVES IN CUSTOMER ENGAGEMENT, FINANCIAL SERVICES AND BRANDING TO DRIVE
GREATER COMPETITIVE ADVANTAGE AND POSITION WOOLWORTHS TO BETTER MEET
CUSTOMER NEEDS AND EXPECTATIONS
SOLID ORGANIC GROWTH IN ALL BUSINESSES
ACQUISITIONS AND PARTNERSHIPS IF OPPORTUNITIES ARISE WILL ASSIST GROWTH
The Board of Woolworths Limited today released the profit and dividend announcement of Woolworths
Limited and its controlled entities for the 53 weeks ended 29 June 2008.
Woolworths Limited Managing Director and CEO, Michael Luscombe said, “Today we are pleased to
report a net profit increase of 25.7% to $1,626.8m. This has been a rewarding year for our team with our
business performing well overall. The delivery of quality results on a consistent basis reflects the ongoing
implementation of our strategy. This is a testimony to our team who have worked hard to execute our
strategies and build a solid base for sustainable profitable growth into the future.
We have continued to refine our brand proposition with significant investment in price, merchandise range
and quality during the year. This investment continues to deliver gains in market share. We continue to
offer great value and choice to our customers whilst ensuring our businesses operate efficiently so we can
continue to maintain low prices”.
Chairman’s Comment
Commenting on the result, the Chairman of Woolworths Limited, James Strong said, “Woolworths is
proud of its successful track record. Woolworths has developed significant intellectual property reflected in
our world class supply chain capability and retail offer. Our people have great depth of retail knowledge
and experience, which enables them to define and execute strategies successfully. Our depth of talent,
continued improvement of our existing businesses, expansion into new categories/businesses domestically
or by extending our capabilities overseas, provide a platform for future growth.
The 24.3% increase in Dividend per Share (DPS) to 92 cents (1H: 44 cents, 2H: 48 cents) from 74 cents in
2007 reflects the confidence that the Board has in the company’s operations, results and the continued
focus to provide improved shareholder returns.”
2
Highlights for the year
Some of the more significant achievements made in the current year are:
•
The further development of our format for Supermarkets and BIG W has been the outcome of
continuous work over the last few years. The new formats are a result of better understanding our
customer needs and adapting concepts we obtained from looking at overseas retailers to the
Australian market. This is a continuous process at Woolworths - the new 2010c Supermarket and
BIG W represents our current format, however this will continually evolve and improve. The next
stage is the launch of new brand logo for the Australian Supermarkets – another step in
reinvigorating our offer to customers.
•
The initial results of the acceleration of refurbishment activity in Supermarkets and BIG W are
being well received by our customers. Initial results are pleasing and achieving business case
expectations. At the time of this release we have approximately 180 Supermarkets in this new 2010c
format.
•
The new supply chain platform we have established continues to deliver financial benefits. All our
new Distribution Centres (except Brisbane which is still in commissioning phase) have achieved or
are exceeding their business operating ratios. The intellectual property we have developed in our
supply chain systems is now being applied to other businesses in Woolworths, including New
Zealand Supermarkets, BWS, Dan Murphy, BIG W and Consumer Electronics. Our Liquor DCs are
being commissioned in July 2008 (Sydney) and September 2008 (Melbourne).
•
Our Cards Program, which incorporates Gift cards, the “Everyday Rewards” program and our new
“Everyday Money” Credit Card provide an exciting platform that will transform the way we
engage with our customers.
•
The nationwide launch of our “Everyday Rewards” program is now complete and has exceeded
expectations with over 3.8 million cards on issue. This program replaces paper petrol dockets with
a convenient card-based system. Customers have started to see other benefits arising from being part
of our “Everyday Rewards” program as we seek to engage with our customers in new ways.
•
Our investment in our financial services capability now means that the majority of financial (debit
and credit) transactions are processed through our own switch with direct links now established with
the four major Australian banks.
•
Our “Everyday Money” Credit Card is due to be officially launched on 1st September 2008 and
provides a compelling value offer to our customers. We are very pleased to have HSBC as the credit
card issuer and MasterCard as our scheme partner. The credit card reward program will enable
reward points to be redeemed exclusively via Woolworth’s “Everyday money shopping cards”. In
addition the card will have a high level of security which will enable the launch of non-contact
payment at selected Woolworths petrol locations by the end of 2008. This will provide an exclusive
convenience to our customers and help ease congestion at our sites.
•
Good progress has been made in integrating the New Zealand business which is on track for
completion towards the end of 2008. The introduction of new refreshed formats which have
commenced this year will continue, with a refurbishment programme now well established. A new
store rollout programme to enhance our customer offer is now underway.
•
The strategic review of our Consumer Electronics business is well underway with a focus on
repositioning of the brands, engaging our customers with a new in-store experience and introducing
new product and service offerings. Excellent results have been achieved to date with our trial stores.
3
Next Phase of Growth
Woolworths’ core Australasian business is now performing at a level that provides an excellent platform
for continued investment in future growth.
We have a strong track record of growth, while maintaining momentum in our core business.
Woolworths has developed a capability to enter and develop new categories and new businesses and
integrating them successfully. Examples in recent years include liquor, petrol, private label, hotels and
New Zealand supermarkets.
Growth initiatives include:
•
•
•
•
•
Continuing development of initiatives to drive our core business and reinvigorate our offer.
Clear defined plans for space growth for all businesses.
Continuing to leverage the intellectual property in our supply chain.
Investment in new categories.
A disciplined and targeted strategy on acquisitions and partnerships. Woolworths believes there are
opportunities to fill gaps in its existing category reach within Australia and New Zealand by
acquiring and partnering with existing businesses with strong brands and talented, motivated
management teams. Woolworths also continues to look at opportunities outside Australia.
Social and Corporate Responsibility
During the year, we have had some important achievements within the areas of Social and Corporate
Responsibility. In November 2007, we published a Sustainability Strategy (2007-2015) and two Social
Responsibility reports – focussed on Workplace and Society. The reports are available at
www.woolworthslimited.com.au. We are already trialling various energy efficiency measures in two
“Green Supermarkets" and continue to pursue other measures that will reduce energy consumption and
help meet our environmental goals. We have commenced a renewal of our 3000-strong company car fleet,
phasing out 6 cylinder petrol vehicles with more fuel-efficient turbo diesels and hybrid cars.
We value our people and are committed to ensuring they are engaged on fair terms. The focus on the safety
and wellbeing of our employees continues with our safety campaign “Destination Zero” active in all
businesses. In Australia, the recently announced enhancements to paid maternity leave entitlements applied
from 1 July 2008.
In New Zealand, we have increased the minimum youth wage and increased post-retirement payments to
contribute over and above the minimum obligation under the “KiwiSaver” scheme. We are confident these
initiatives represent the right thing to do by our employees. From a governance perspective, we continue to
focus on Compliance and Risk Management disciplines both at the Board and senior management level.
4
ACCC review of Grocery Pricing
The Australian grocery industry was the subject of the ACCC Review of Grocery Pricing. The Inquiry
process was exhaustive and comprehensive, taking submissions from hundreds of stakeholders in this
complex industry. Woolworths believes the ACCC’s findings in relation to the grocery market are a
justifiable statement that the market is functioning well and is “workably competitive” and that global
factors are driving food price inflation. Woolworths believes that competition is good for its business
because it provides the incentive for continuous development and improvement.
Earnings Before Interest and Tax (EBIT)
($ million)
Food and Liquor
Petrol
Australian Supermarkets Division
New Zealand Supermarkets
BIG W
Consumer Electronics – Aust & NZ
Consumer Electronics - India
General Merchandise Division
Hotels
Total Trading Result
Property Expense
Central Overheads
Other significant items (1)
Continuing Operations
Wholesale Division
Group EBIT
(1)
2007
Statutory
(52 weeks)
2008
Statutory
(53 weeks)
Change
1,597.1
82.9
1,680.0
155.1
138.6
71.1
(4.3)
205.4
183.7
2,224.2
(23.8)
(88.3)
(3.3)
2,108.8
2.5
2,111.3
1,913.7
81.9
1,995.6
169.2
161.2
68.1
(5.0)
224.3
215.1
2,604.2
(16.6)
(91.7)
28.6
2,524.5
4.3
2,528.8
19.8%
(1.2%)
18.8%
9.1%
16.3%
(4.2%)
16.3%
9.2%
17.1%
17.1%
(30.3)%
3.9%
966.7%
19.7%
72.0%
19.8%
2008 includes the profit on sale of certain properties ($49.7m) and the costs associated with certain key strategic initiatives,
including the nationwide rollout of our “Everyday Rewards” card and the development of our financial services capability.
5
2007 – 2008 BUSINESS PERFORMANCE
The consistent delivery of quality results is fundamental to our success. Specifically, in every year since
2000 we have delivered:
•
•
•
Sales growth in the upper single digits (or higher);
EBIT growth in excess of sales growth;
CODB reductions in excess of our stated target of 20 bps per annum (when the distorting impacts of
Hotels and Petrol are excluded)
During this period, Woolworths has experienced a significant amount of change and experienced varied
economic conditions. These targets have been met with full regard for sustaining the long term profitability
of our business. We have also successfully maintained our financial strength and flexibility as reflected in
the maintenance of our long term credit ratings for Standard & Poors (A- since 2001) and Moody’s (A3
since 2005).
In the current year, we have again exceeded these key targets with sales growing in the upper single digits
(up 10.7% or 8.7% normalised for the extra week) and EBIT grew faster than sales (up 19.8%). We
achieved a CODB reduction of 43 bps (greater than 20 bps if we exclude Hotels and Petrol) and delivered
EPS growth (up 24.0%) in excess of EBIT growth of 19.8%. EBIT margin strengthened by 41 basis points
over last year.
The result includes certain one-off / significant items:
•
•
•
•
The profit on sale of certain properties, plant and equipment totalling $34.4m (H1: $(0.5)m; H2:
$34.9m).
Costs associated with certain strategic initiatives outlined at half year, including the nationwide
rollout of our “Everyday Rewards” card and the development in our financial services capability
totalling $21.2m.
Transition costs associated with moving to our new supply chain arrangements of $31 million (2007:
$40 million) are included in the Australian Supermarkets result. These costs will reduce significantly
in the 2009 financial year, however this will be offset somewhat by costs relating to our new liquor
DCs.
Dividends from the Warehouse Group are included in net financing expense and total $14.7m (H1:
$10.8m; H2 : $3.9m). The first half dividend includes a special dividend.
The headline CODB has declined by 43bps. When we exclude the impact of the one-off items outlined
above the headline CODB reduction was 38 bps. Similarly, when the distorting impacts of Petrol and
Hotels are excluded, the group exceeded its targeted 20 bps reduction in CODB.
We remain confident that we can continue to secure costs savings in excess of 20 bps per annum for the
foreseeable future.
Gross margins for the group have declined 2 bps reflecting the impact of higher fuel prices on Petrol
revenues. When we exclude Hotels which has a different gross margin structure, gross margins have
increased 3 bps to 23.92%. This gross margin compares to the gross margin of 24.91% in 2004 (pre
Hotels).
6
Our cash flow and balance sheet remain strong. Our cash flow from operations was $2.7 billion up 15.7%
from last year. The increase in capital expenditure reflects the acceleration of the reinvestment in our
business including the acceleration of our refurbishment activity. The strong cash flows during the period
were used to repay debt, with net repayable debt down $261.7 million (10.7%).
Inventory levels continue to be well managed with a reduction in average inventory days of 0.8 days
(2007: 0.2 days including imported inventory). When we exclude the impact of incremental imported
inventory the reduction remains at 0.8 days (2007: 0.7 days), reflecting the fact that the increase in volume
of imports was offset by an improved exchange rate.
Woolworths previously advised the market, that, in the absence of any major acquisitions we would
undertake some form of capital management in the 2008 calendar year. Whilst capital management
remains an important issue, given the current uncertainty in the debt and equity markets, it is considered
more prudent to defer any capital management activity at this time. A share buyback will be continually
assessed in the context of other initiatives and the capital market environment.
Our current focus is to maintain a capital structure that will preserve our capital strength and give us the
flexibility to pursue further growth opportunities. Our balance sheet, debt profile and strength of our credit
ratings ensure we are very well placed for future growth both organically and through acquisition.
7
Australian Supermarket Division (Including Liquor and Petrol)
FY07
FY08
Change
32,582
36,143
10.9%
Gross Margin (%)
23.41
23.45
4 bps
Cost of Doing Business (%)
18.25
17.93
-32 bps
5.16
5.52
36 bps
EBIT ($ million)
1,680.0
1,995.6
18.8%
Funds Employed ($ million)
2,271.6
2,805.4
23.5%
75.9
78.6
2.7%pts
Sales ($ million)
EBIT to sales (%)
Return on Funds Employed (%)
For the full year, Australian Supermarket division sales increased 10.9%, of which Food and Liquor sales
grew 9.9%. EBIT grew faster than sales, increasing by 18.8%. The Australian Supermarket division’s
EBIT margin increased from 5.16% to 5.52%, an increase of 36 bps. The result includes $31 million of
transition costs (2007: $40 million) associated with moving to our new supply chain arrangements.
The increase in funds employed reflects the store openings and refurbishment activity during the year.
Inventory levels continue to be well managed. The reduction in average inventory days for the Australian
Supermarket division was 0.8 days. In the current year, the increase in volume of imports was offset by an
improved exchange rate. Accordingly, when we exclude the impact of incremental imported inventory the
reduction remains at 0.8 days (2007: 0.2 days including imported inventory).
Australian Food and Liquor
Australian Food and Liquor delivered another solid result, with sales growth of 9.9% (7.9% based on 52
weeks) and EBIT growth exceeding sales growth. Comparable sales have remained strong at 6.3%
(Inflation 2.9%), which in real growth terms is an improvement on last year. (2007: 6.6%; Inflation 3.5%).
We continue to make gains in market share, with solid increases in key measures such as customer traffic,
basket size and items sold.
This has been an extremely rewarding year with significant re-investment in our business.
During the year we accelerated our refurbishment activity in Supermarkets. Our 2010c format store is
proving to be very successful with 160 refurbishments undertaken this year (2007: 65). Initial results are
pleasing and achieving business case expectations with improvements in both sales and gross margin. At
the time of this release we have approximately 180 stores in this new format with plans for a further 149
stores in 2009 financial year (including 134 refurbishments).
The expansion of our private label range continues with our Homebrand, Select, Freefrom, Naytura and
Organics ranges gaining strong customer acceptance.
Our inventory management systems continue to provide reduced inventory levels and an improved in-stock
position. The financial benefits from our supply chain are still being realised with further efficiencies
available as our infrastructure matures.
8
Woolworths’ objective is, and has consistently been to, reduce costs, and improve value and lower prices.
The improvement in Food & Liquor gross margins is attributable to several factors:
•
•
•
the change in sales mix achieved through such initiative as price Rollback campaigns;
the success of Woolworths Select private label;
improvements in buying, including the benefits gained through the increased level of activity through
our overseas buying offices.
Offsetting these factors are several strategic price re-investment activities including the reduction to state
based price groups and significant price investment in key staple products such as bread and milk.
Australian Food & Liquor has achieved our targeted CODB reduction of 20bps per annum and has been
assisted by continued fractionalisation of fixed costs being achieved through strong sales growth. This
outcome has been achieved despite incremental operating expenditure associated with increased
refurbishment activity.
We opened 30 new supermarkets during the year ahead of our targeted range of 15 to 25 stores. Total
trading area in Australian Food & Liquor grew by 5.2% which is also in excess of the targeted range of
3.0% per annum.
Liquor
All existing liquor operations, including Dan Murphy, BWS and attached liquor, continue to perform well
and recorded strong growth in both sales and profits. Total liquor sales for the year were $4.7 billion (1)
(2007: $4.1 billion), reflecting solid comparable sales growth and the contribution from new store
openings. We continue to expand our range of our exclusive brands and control labels. An example is the
launch of our own low-carb beer called “Platinum Blonde” in July 2008.
Dan Murphy has further expanded its operations in the year with 22 stores opened bringing the total
number of Dan Murphy stores to 89. Sites and licences have been obtained to operate a strong national
network of 155 Dan Murphy stores around Australia within the next three years. Dan Murphy provides
customers with excellent value for money, extensive product ranging, personalised service and expertise.
At the end of the year Woolworths Limited operated 1,077 liquor outlets.
(1)
Total liquor sales include sales from Supermarkets attached liquor, BWS, Dan Murphy and ALH bar sales and
are based on 53 weeks. Normalised for 52 weeks total liquor sales were $4.6 billion.
9
Petrol
For the full year, petrol sales were $5.6 billion, an increase of 16.6%, reflecting higher petrol prices.
(13.9% normalised to exclude the extra week). Petrol comparable sales increased by 11.1% during the year
(20.4% in the fourth quarter), with comparable volumes having increased 0.6% over the year (FY07:
4.8%).
The increase in comparable volumes reflects our commitment to offer competitive prices to our
customers across all of our sites and the success of the nationwide rollout of our Everyday Rewards
program. Average sell prices were higher than the previous year in the last three quarters.
Our convenience stores delivered strong double digit comparable sales growth for the year.
Petrol EBIT was lower than last year, reporting a result of $81.9 million (2007: $82.9 million). EBIT
margins were lower at 1.5% (2007: 1.7%), with a lower fuel margin offset by improved non-fuel sales and
margins. The lower fuel margins reflect the decision not to pass onto customers the full cost increases
experienced over the last 12 months increasing the competitiveness of our offer.
At the end of the financial year, we had 522 petrol stations including 133 Woolworths/Caltex
alliance sites. We opened an additional 21 petrol canopies during the year, including one alliance
site.
An exciting initiative in our Petrol business that complements our new credit card is “epump”. The credit
card will have a high level of security which will enable the launch of a non-contact “pay at pump” facility
called “epump” at Woolworths petrol locations by the end of 2008. This will provide an exclusive
convenience to our customers by reducing the time taken to fill up and pay, helping ease congestion at our
popular sites.
10
New Zealand Supermarkets (Progressive)
FY07
$AUD
3,940
FY08
$AUD
4,170
FY07
$NZD
4,527
FY08
$NZD
4,859
Change
$NZD
7.3%
Gross Margin (%)
21.77
21.87
21.77
21.87
10 bps
Cost of Doing Business (%) (1) (2)
17.54
17.52
17.54
17.68
14 bps
4.23
4.35
4.23
4.19
- 4 bps
Trading EBIT ($ million)
166.5
181.3
191.3
203.7
6.5%
Less intercompany charges ($ million)
(11.4)
(12.1)
(13.1)
(14.1)
7.6%
Reported EBIT ($ million)
155.1
169.2
178.2
189.6
6.4%
2,263.5
2,077.1
2,510.7
2,630.2
4.8%
Sales ($ million)
EBIT to sales (%) (1)
Funds Employed ($ million)
(1)
(2)
Excludes intercompany charges
AUD EBIT and CODB include the benefit from hedging NZD earnings.
New Zealand Supermarkets achieved sales of NZD $4.9 billion for the year, which represents a 5.8%
increase (7.3% in NZD terms). Comparable sales for the year were solid at 6.4% with inflation at 3.1%.
EBIT growth was modest with EBIT margins (in NZD terms) down slightly as we experience tighter
economic conditions and reflects the investment in training and support necessary for the rollout of new
core systems such as AutostockR. In addition, we have increased the minimum youth wage and increased
our post-retirement payments to contribute over and above the minimum obligation under the “KiwiSaver”
scheme. These costs are reflected in a higher CODB up 14 bps. (in NZD terms). Average inventory levels
were well managed being down 0.8 days on last year.
Gross profit margin increased slightly up 10bps with further price re-investment, offset by significant
improvements in shrinkage.
November 2008 will be the three year anniversary of the acquisition of the Progressive business in New
Zealand. The planned repositioning of the Progressive Supermarkets business in New Zealand is on track
to achieve its’ three year objectives. The integration has gone well.
In particular, the business is well positioned for the future, with significant improvements to flow from our
investment in new core systems.
Whilst the benefits obtained from harmonisation allowed our New Zealand Supermarkets business to be
significantly more competitive, the establishment of the right business platform from which to grow this
business was critical to ensure we could continue to improve and drive the performance of this business.
By November this year, we will have completed a transition of this business with our key support systems
such as AutostockR, warehouse management, transport, back office, front of store (point of sale) in place.
11
New Zealand Supermarkets (continued)
The focus is now on improving our range. The Select, Naytura, Organics and Freefrom ranges are being
gradually introduced into New Zealand. The Homebrand rollout is virtually complete and has been well
received by customers.
We have also initiated a major refurbishment and new store roll out initiative to improve our offer to
customers and increase our footprint as well as expanding the trading area of existing stores. During the
year we opened four stores, completed the refurbishment of six and commenced a further nine with more
in the pipeline for completion in 2009. Our property team has identified and secured 17 sites for future
development.
Following an extensive review we are now putting in place a program to roll out a new supply chain
infrastructure to support the New Zealand business.
12
BIG W
FY07
FY08
Change
Sales ($ million)
3,465
3,916
13.0%
Gross margin (%)
29.80
29.99
19 bps
Cost of Doing Business (%)
25.80
25.87
7 bps
EBIT to sales (%)
4.00
4.12
12 bps
EBIT ($ million)
138.6
161.2
16.3%
Funds Employed ($ million)
471.1
540.7
14.8%
30.4
31.9
1.5% pts
Return on Funds Employed (%)
BIG W reported a solid result reporting double digit growth in both revenue and earnings. Sales grew by
13.0% (11.4% normalised for the extra week). Comparable sales for the full year were 4.7% (FY07: 3.4%).
EBIT grew faster than sales, increasing by 16.3%.
The result reflects the improvements that have been made through the repositioning of the BIG W
business, principally by making the range more relevant for the customer. The transition out of certain
ranges continues and is reflected in these results. We continue to maintain BIG Ws everyday low price
position.
During the year we accelerated our refurbishment activity undertaking 16 refurbishments (2007: 3) and
plan to undertake a similar number in the 2009 year. In addition, we have retrofitted a number of our key
merchandising initiatives across our store network. The results reflect the endorsement by customers of the
merchandise departments that have been refreshed, with positive comparable sales results being delivered
in each of the last seven quarters.
Gross margins increased sharply in the first half of the year (by 109 basis points) due to improved buying,
increased sourcing through the Hong Kong buying office and the strong Australian dollar. However in the
second half of the year these were offset by changes in sales mix and additional re-investment in price as
BIG W maintained its everyday low price position in the market. As a result the increase in margin for the
year was reduced to 19 basis points.
Similarly CODB has increased 7 bps over the year despite a first half increase of 74bps. The reduction in
the second half reflects strong cost control at the store level and the benefits of cost fractionalisation
achieved through improved sales.
Average inventory levels were well managed being down 1.1 days on last year.
Nine BIG W stores were opened in the year (1H08: 6 stores, 2H08: 3 stores), taking the total number of
stores in the division to 151.
The increase in funds employed reflects the opening of new stores and additional refurbishments during
the year.
13
Consumer Electronics (Australia and New Zealand)
FY07
FY08
Change
Sales ($ million)
1,285
1,427
11.1%
Gross margin (%)
28.21
27.49
-72 bps
Cost of Doing Business (%)
22.68
22.72
4bps
EBIT to sales (%)
5.53
4.77
-76 bps
EBIT ($ million)
71.1
68.1
(4.2%)
311.9
338.9
8.7%
23.4
20.9
(2.5%pts)
Funds Employed ($ million)
Return on Funds Employed (%)
The Consumer Electronics market continues to experience significant price deflation in a very competitive
market. Sales for the full year reached $1.4 billion, an 11.1% increase on last year (9.0% normalised to
exclude the extra week) with comparable store sales increasing by 4.3%. After adjusting for the effect of
exchange rate movements in the New Zealand dollar, sales have increased 11.1%, with comparable sales
growth of 4.4%.
Whilst the sales result is solid, the modest EBIT result of $68.1 million reflects price deflation, change in
sales mix, tighter discretionary spending and a continuing competitive market.
Gross margins decreased by 72 bps reflecting these tight market conditions and significant price
reinvestment activity to drive sales and markdown activity as we exit or shrink certain categories during
the year, as part of the repositioning of the brands. Strong unit sales growth and market share growth have
been achieved in a number of key categories, including computers, gaming and in-car navigation.
We remain confident of the service, quality and value which this business offers to customers, but
recognise there are areas for improvement in this business
The strategic review of our Consumer Electronics business is well underway with a focus on repositioning
of the brands, engaging our customers with a new in-store experience and introducing new and exciting
product and service offerings. We are well positioned in the current trading environment to improve our
offer and are pleased with the early results from our new trial concept store which opened in May 2008.
The high level of new store openings in the year has impacted our ability to fractionalise costs as new
stores ramp up to maturity. As a result CODB has increased 4 bps when compared to the previous year.
During the year, 33 new stores were opened, taking total stores to 416.
Average inventory days were down 1.0 day, which is pleasing given the significant number of new store
openings during the year.
Funds employed have increased reflecting the growth in store numbers and an increase in working capital.
14
India
The business venture with TATA is still in its infancy, with 22 retail stores operating under the “Croma”
brand, serviced by 4 distribution centres which we operate. As part of this venture Woolworths Limited
provides buying, wholesale, supply chain and general consulting services to TATA. The wholesale
operations are meeting our expectations, and recorded sales of $104 million during the year and made an
operating loss of $5.0 million.
15
Hotels
FY07
FY08
Change
Sales ($ million)
1,032
1,113
7.8%
Gross margin (%)
82.45
82.28
-17 bps
Cost of Doing Business (%)
64.66
62.96
-170 bps
EBIT to sales (%)
17.79
19.32
153 bps
EBIT ($ million)
183.7
215.1
17.1%
Hotel sales of $1.1 billion represented an increase of 7.8% (5.9% normalised to exclude the extra week)
with overall comparable sales growth of 1.3%. Comparable gaming sales for the year were up 1.6%, which
is a pleasing result given the influence of smoking bans and tighter trading conditions in the fourth quarter.
Gross margins have decreased by 17 bps reflecting the change in sales mix within the hotel network.
Growth in food sales has exceeded the growth from gaming. Whilst food margins have improved slightly,
the shift in mix has brought the overall margin down slightly.
Continued focus on costs assisted by the addition of freehold venues has driven the significant reduction in
CODB which has decreased by 170 bps.
The introduction of smoking bans in three states during the year was well managed and ensured that the
impact felt by our business was far less significant than the market in general.
A further 9 properties were added to the portfolio taking the total hotels to 271 premium hotels and a total
of 1,345 accommodation rooms.
16
Central Overheads, Property Income/Expense
For the full year, central overheads have increased by $3.4 million (3.9%). The reduced property expense
reflects lower level of costs associated with the management and development of our property portfolio.
Other significant items includes the profit on sale of certain properties ($49.7m) and the costs associated
with certain key strategic initiatives, including the nationwide rollout of our “Everyday Rewards” card and
the development of our financial services capability.
Net Financing costs and Tax Expense
Net financing costs of $191.3 million have reduced significantly from the prior year ($233.6 million)
reflecting the lower debt levels driven by strong operating cash flows and the receipt of dividends ($14.7
million)
Tax expense is 29.3% down slightly from 30.2% last year, reflecting the receipt of a fully imputed special
dividend from The Warehouse Group and other minor tax differences.
Balance Sheet and Cash Flow
The balance sheet and cash flow position remain strong. Cash generated by operating activities was $2.7
billion up 15.7% on the prior year reflecting strong earnings growth and benefits from improvements in
working capital.
The net investment in inventory improved by $330 million. The year end inventory balance increased by
9.9% which is slightly above the normalised sales growth of 8.7%. This reflected our decision not to drive
down inventory levels at year end so that sales were not negatively impacted in July.
Trade creditors and other creditors have increased due to the timing of monthly creditor payments (given
the 53rd week), the increase in inventory and general business growth.
Receivables have increased reflecting the timing of July occupancy prepayments.
As a result of the above, negative working capital has increased $258 million to $2,344.7 million.
Fixed assets and investments increased from $4,886.1 million to $5,825.5 million, reflecting the increase in
property plant and equipment offset by depreciation.
Intangibles decreased by 3.4% from $5,003.5 million to $4,835.2 million, reflecting foreign exchange
movements in respect of the New Zealand goodwill and intangibles. Other additions reflect the purchase of
individual hotels, stores and liquor licences.
Net repayable debt has decreased by $261.7 million (by 10.7%) to $2,181.1 million reflecting the strong
operating cash flows during the period.
ROFE (average) increased from 27.1% to 31.4%.
.
17
Capital Management
Woolworths currently sets its capital structure with the objectives of minimising its weighted average cost
of capital while retaining flexibility to pursue growth and capital management opportunities. Consistent
with these objectives, Woolworths has maintained its credit ratings of A- from Standard and Poors and A3
from Moody’s Investor Services.
To the extent consistent with these objectives and target ratings, Woolworths undertakes capital return
strategies that seek to increase EPS and distribute franking credits to shareholders, mainly through ordinary
dividends and share buybacks. Since 2001, over $5,770 million, comprising off and on-market buy-backs
and dividends, has been returned to shareholders (including the final dividend for the financial year ending
29 June 2008).
Woolworths’ capital management strategy has enhanced EPS growth whilst allowing Woolworths to take
advantage of growth opportunities.
Franking credits available for distribution after 29 June 2008 are estimated to be $823 million (following
payment of the final dividend).
Our objective of maintaining a capital structure that will preserve our capital strength which gives us the
flexibility to pursue further growth opportunities remains unchanged. Our balance sheet, debt profile and
strength of our credit ratings ensure we are very well placed for future growth both organically and through
acquisition.
There is a small amount of debt (AUD 300 million) in domestic medium term notes maturing in September
2008 which will be refinanced within existing debt facilities. As at 29 June 2008, undrawn committed bank
debt facilities available to Woolworths Limited totalled $2.1 billion.
In addition to our solid operating cashflows, our strong balance sheet position has been assisted by a focus
on property sales to take advantage of the then particularly attractive property markets. Over the last 3
years Woolworths has sold $1.3 billion of both industrial and retail property including the sale and
leaseback of our distribution centres with proceeds received of $727 million (2007) and $82m (2008) used
to repay debt. Our new liquor distribution centres which open in the second half of 2008 are purpose built,
design and construct projects on long term operating leases. Capital expenditure is limited to fixtures and
equipment.
Woolworths previously advised the market, that, in the absence of any major acquisitions we would
undertake some form of capital management in the 2008 calendar year. Whilst capital management
remains an important issue, given the current uncertainty in the debt and equity markets, it is considered
more prudent to defer any capital management activity at this time. A share buyback will be continually
assessed in the context of other initiatives and the capital market environment.
18
Supply Chain and Logistics Initiatives
After seven year’s in the making, Woolworths has now completed the majority of the end-to-end supply
chain program in Australian Supermarkets. The intellectual property we have developed in our supply
chain teams, IT systems, DCs and transport operations is now being applied to other businesses in
Woolworths, including New Zealand Supermarkets, Liquor, BIG W and Consumer Electronics.
The principal systems that have driven the transformation of our supply chain are: StockSmart (DC
forecast based replenishment), AutoStockR (store forecast based replenishment), Warehouse Management
Systems and Transport Management Systems. These systems have significantly improved productivity
enabling higher levels of “in stock” performance, which delivers a competitive advantage.
The development of our Supermarkets’ supply chain is now almost complete, with the successful full
commissioning of the Brisbane RDC at Larapinta, allowing transition from the previous network of 31
DC’s down to nine Regional Distribution centres, two National Distribution Centres (NDCs) and two
liquor DC’s.
The financial benefits of this program will continue over future years as the DC infrastructure reaches
mature efficiency levels and we put the transition costs behind us. The DCs located in Perth, Adelaide,
Wyong and Wodonga are already exceeding their initial projected business case. These benefits will
underpin our targeted and consistent reduction in CODB. For stores, the introduction of time phased
replenishment, store re-stocking capabilities along with store ready unit load devices such as shelf ready
trays and roll cages, is reducing overall costs. The further roll out of produce crates in our stores
commences in February 2009.
The efficiency of inbound freight is being improved by Woolworths’ through our Primary Freight
business, enabled by our inbound Transport Management System (TMS). Woolworths Primary freight
business has been very effective, outperforming industry benchmarks. We are currently rolling out our
outbound Metro Transport Model (MTM) this involves Woolworths ownership of specifically designed
trailers and the deployment of industry leading capacity planning, optimisation and freight tracking
systems which will optimise transport from our DCs to stores including backloading.
Transition costs
The Australian Supermarket result includes $31 million of transition costs (2007: $40 million) associated
with moving to our new supply chain arrangements. These costs relate to our new distribution centre in
Brisbane (ambient) and in Sydney (Temperature controlled and produce) and reflect the ramp up to an
efficient operating state which can take several years. These costs will reduce significantly in 2009
financial year, however this will be offset somewhat by costs relating to our new liquor DCs.
New Zealand Supermarkets
In New Zealand, the rollout of StockSMART and AutoStockR is progressing well with completion
expected by the end of calendar year 2008. We have developed a supply chain strategy that will improve
the service and cost performance of our logistics operations and will be progressively implemented over
the next three years.
19
Liquor
We successfully introduced to the network our new Sydney Liquor DC’s, and expect by the end of the first
quarter 2009 to have introduced our Melbourne Liquor DC. We have identified an opportunity to
consolidate our Liquor distribution for South East Queensland into a Liquor DC located in the Brisbane
area and are continuing to source a suitable location. AutoStockR (store forecast based replenishment) is
being rolled out into our Free Standing Liquor Stores (BWS and Dan Murphy’s) which will be complete in
2008.
BIG W
The BIG W Quicksilver program has been established to transform BIG Ws' flow of merchandise to
stores. A number of significant initiatives are currently underway and are proceeding on schedule. These
initiatives include design and developing the third BIG W distribution centre, developing and
implementing store forecast based replenishment systems that build on the capabilities of AutostockR and
enhancing our capabilities in planning the flow of merchandise. These initiatives are necessary to support
BIG Ws' future business growth.
Dick Smith Electronics
DSE completed a comprehensive review of Woolworths Australian supply chain which has led to the
recommendation for a new distribution centre in Sydney to service the entire store network.
The DC’s in India continue to deliver efficiency improvements and are well placed to support the retail
expansion.
Global Sourcing
We have made strong progress in developing our global sourcing capability. We now have two overseas
procurement offices operating successfully located in Hong Kong and Shanghai covering the China and
greater Asia regions and employing approximately 70 staff. Further development activities focus on
expanding our direct procurement activities to other regions, improving our quality and ethical sourcing
controls as well as improving our inventory and supply chain management.
20
Strategy and Growth
Woolworths’ vision is to continue to drive its retail business, bringing to customers greater convenience,
quality, lower prices and better value, range, freshness and service.
The Board and Management of the Woolworths Group are committed to its consistent and clear strategies
that have driven growth to date and will continue to deliver growth into the future. The strategy is clear
and the experienced retail team has the skills and commitment to drive continued success.
Our long term cost advantages obtained under Project Refresh will be maintained and increased. The focus
remains on continually improving the customer offer rewarding customers with lower prices, better value,
quality, range, freshness, service and convenience.
The foundations for sustainable profitable growth are well established. There are significant growth
opportunities in all our businesses.
There are several key elements that underpin our strategy:
•
•
•
•
•
•
•
We have clearly stated long term performance targets.
We have defined plans for space growth, with minimal cannibalisation expected.
There is continuing opportunity to grow market share in all our businesses in both Australia and New
Zealand. Woolworths market share of Food Liquor & Grocery remains below 31%. Independent
grocers and speciality stores hold just under 50%.
We have completed a substantial portion of the end-to end supply chain program in Australian
Supermarkets. The financial benefits of this world class supply chain will continue over future years.
This intellectual property is being leveraged across other divisions.
We have a strong track record of growth – through re-investment in our existing business,
development of new categories, new businesses and adjacencies and continually re-invigorating our
offer. This has been demonstrated across each of our businesses and will continue.
There is significant opportunity for Woolworths to leverage its scale and store distribution to
introduce new products, services, categories and formats.
Numerous opportunities exist to drive future growth by continuing to reinvest in the business.
Expansion opportunities
Woolworths is the 25th largest retailer in the world. Woolworth’s core strengths include its world class
supply chain capability; low cost culture and its depth of talent.
There are many opportunities for Woolworths to leverage these strengths and augment our existing
business plans to drive growth both organically and through the continual evaluation of acquisition
opportunities. There are also opportunities to leverage the intellectual property that we have developed in
our supply chain and retailing systems to other businesses. We have a depth of talent with significant retail
knowledge and experience. We are confident that these attributes provide the platform for future growth.
We are in the early stages of evaluating opportunities internationally. Any such opportunities must
leverage these core strengths and would be high volume, low margin businesses. Any international
expansion would have full oversight from the Board, be undertaken in a prudent and disciplined fashion
and meet the hurdles required for all our capital investment decisions.
21
In our existing businesses there are a number of key growth initiatives currently underway:
•
•
•
•
•
•
•
•
Continued investment in price, range merchandise and quality across all our brands.
Continued development of private label in all our trading divisions. The expansion of our range
continues with our Homebrand, Select, Freefrom, Naytura and Organics ranges gaining strong
customer acceptance.
We have made and will continue to make progress on initiatives that are enhancing our understanding
of what the customer wants, through increased market research capability and data analysis.
We continue to invest in our financial services capabilities, with a well developed product roadmap
that leverages our cards program, with plans to offer our customers general insurance and the
convenience of a financial services portal.
We will continue the acceleration of the refurbishment activity in Supermarkets and BIG W.
Capital expenditure for the 2009 financial year is expected to be similar to 2008 at c $1.9 billion.
We continue to expand our global sourcing activities. As we increase our capabilities in this area we
continue to secure cost price savings and improvements in both quality and range.
There is significant opportunity to leverage our supply chain expertise. The intellectual property
we have developed in our supply chain teams, IT systems, DCs and transport operations is now being
applied to other businesses in Woolworths, including New Zealand Supermarkets, Liquor, BIG W
and Consumer Electronics.
Woolworths continues to focus on improving in-store execution, ranging, stock availability and
customer service.
22
Performance Targets
Long term targets remain unchanged. Woolworths continues to target the following key areas of
performance measurement for its business in the long term, namely:
•
Sales to grow in the upper single digits assisted by bolt-on acquisitions;
•
EBIT growth outperforming sales growth assisted by cost savings;
•
EPS growth outperforming EBIT growth assisted by capital management;
•
CODB reduction of 20 bps per annum (minimum) – when Petrol and Hotels are excluded. This is
underpinned by our supply chain capabilities; and
•
Maintenance of targeted credit ratings.
Woolworths’ long term objective is for EPS growth to outperform EBIT growth. However, when
Woolworths undertakes major acquisitions which result in the need to defer normal capital management
initiatives, EPS growth in such periods may not outperform EBIT growth.
23
Defined plans to continue space roll-out
In the coming year, we will continue the reinvestment in our store network, both through new store
openings and the level of refurbishment activity. Our new concept stores in Supermarkets, BIG W and
Consumer Electronics took a significant period of time to develop, test, evaluate the financial performance
and secure the necessary resources to roll them out. These formats have been strongly endorsed by our
customers.
Gross store
openings in
2008
Australian Supermarkets
30
Target
15-25 new Supermarkets per annum
3%+ space growth
New Zealand
Supermarkets
4
Property team has been expanded and are actively
finding new sites and developing plans to expand
current supermarket trading areas. 17 sites have been
secured for future development.
Dan Murphy
22
Target of 155 stores in 3 years (20 per annum)
BWS
42
Plans to open 10 stores (net) per annum.
Petrol
21
Will grow supporting the Supermarket rollout strategy
BIG W
9
6-10 stores per annum targeting 200+ stores
Consumer Electronics
33
Plans to open 20 stores per annum
Hotels (ALH Group)
9
Acquired selectively as opportunities arise.
Space roll-out is supported by detailed plans for the next 3-5 years identifying specific sites. Minimal
cannibalisation is expected.
24
Current Trading
Early trading in the first quarter has been pleasing. Australian Food & Liquor continues to perform well
and BIG W, Petrol and Consumer Electronics have had a good start to the new financial year. Hotels have
experienced a pleasing improvement in gaming sales. New Zealand Supermarkets has experienced tight
trading conditions as in the fourth quarter.
Future Outlook
Whilst we are pleased with the momentum in the business we are mindful that discretionary spending
continues to be influenced by macro-economic factors such as inflation, fluctuating petrol prices, interest
rates, and lower consumer confidence levels. Subject to the uncertainty these factors create our guidance is
as follows:
We expect overall group sales to grow in the upper single digits.
We also expect that EBIT will continue to grow faster than sales in FY09.
We also expect Net profit after tax for FY09 will grow in the range of 11% to 14%. (on a 52 comparative
week basis) or 9% to 12% on a 52 vs. 53 week basis.
For further information contact:
Ms Clare Buchanan (Public Relations Manager)
Mr Tom Pockett (Finance Director)
(02) 8885 1032 – Media
(02) 8885 1105 – Investors/Analysts
25
Profit and Loss For The 53 Weeks Ended 29 June 2008
Sales
Australian Food and Liquor
New Zealand Supermarkets
Petrol
Supermarket Division
BIG W
Consumer Electronics
(1)
General Merchandise Division
Hotels
Continuing Operations
Wholesale Division
Group Sales
Margins
Gross Profit
Cost of Doing Business
EBIT to sales
FY07
(52 weeks)
($m)
FY08
(53 weeks)
($m)
Change
Change
Normalised
27,745
3,940
4,837
36,522
3,465
1,310
4,775
1,032
42,329
148
42,477
30,501
4,170
5,642
40,313
3,916
1,531
5,447
1,113
46,873
162
47,035
9.9%
5.8%
16.6%
10.4%
13.0%
16.9%
14.1%
7.8%
10.7%
9.5%
10.7%
7.9%
3.9%
13.9%
8.3%
11.4%
14.7%
12.3%
5.9%
8.7%
7.9%
8.7%
25.32%
20.35%
4.97%
25.30%
19.92%
5.38%
-0.02%pts
-0.43%pts
0.41%pts
3,906.9
(1,206.3)
4,494.8
(1,315.9)
15.0%
9.1%
2,700.6
(589.3)
2,111.3
(233.6)
(566.4)
1,311.3
(17.3)
1,294.0
3,178.9
(650.1)
2,528.8
(191.3)
(686.0)
1,651.5
(24.7)
1,626.8
17.7%
10.3%
19.8%
(18.1%)
21.1%
25.9%
42.8%
25.7%
7,803.2
27.1%
1,189.4
108.8
107.9
35
39
74
8,315.9
31.4%
1,206.0
134.9
133.6
44
48
92
6.6%
4.3%pts
1.4%
24.0%
23.8%
25.7%
23.1%
24.3%
Profit
Earnings before interest, tax, depreciation amortisation & rent
(EBITDAR)
Rent
Earnings before interest, tax, depreciation & amortisation
(EBITDA)
Depreciation and amortisation
Earnings before interest & tax (EBIT)
Net financing costs
Operating income tax expense
Net operating profit after income tax
Minority interests
Total profit after tax & outside equity interests
Funds employed (period end)
ROFE (average)
Weighted average ordinary shares on issue (million)
Ordinary earnings per share (cents)
Diluted earnings per share (cents)
Interim dividend per share (cents)
Final dividend per share (cents) (2)
Total dividend per share (cents)
(1)
(2)
Includes wholesale sales relating to Woolworths India (Full year: $104m 2007: $25m)
Final dividend payable on 3 October 2008 will be fully franked at 30%
26
Group Balance Sheet as at 29 June 2008
FY07
24 June 2007
($m)
FY08
29 June 2008
($m)
Change
Inventory
Trade Payables
Net Investment in Inventory
Receivables
Other Creditors
2,739.2
(3,277.4)
(538.2)
490.1
(2,038.3)
3,010.0
(3,878.1)
(868.1)
641.4
(2,118.1)
9.9%
18.3%
61.3%
30.9%
3.9%
Working Capital
(2,086.4)
4,886.1
5,003.5
(2,344.8)
5,825.5
4,835.2
12.4%
19.2%
(3.4%)
7,803.2
8,315.9
6.6%
154.3
100.5
(34.9%)
7,957.5
(2,442.8)
8,416.4
(2,181.1)
5.8%
(10.7%)
5,514.7
6,235.3
13.1%
239.4
242.4
1.3%
Shareholders Equity
5,275.3
5,992.9
13.6%
Total Equity
5,514.7
6,235.3
13.1%
32.5
31.7
45.6
47.3
27.1%
31.4%
Funds Employed
Fixed Assets and Investments
Intangibles
Total Funds Employed
Net Tax Balances
Net Assets Employed
Net Repayable Debt
Net Assets
Minority shareholders equity
Inventory Days (Based On COGS) (1)
Creditor Days (Based On Sales)
(2)
Return on Funds Employed (ROFE)
(1)
(2)
Inventory days reflect the use of rolling average inventory over a 13 month period.
Increase in creditor days reflects timing of payments given the 53rd week.
27
Group Cash Flow
FY07
$m
FY08
$m
2,700.6
3,178.9
(249.8)
(215.5)
(522.4)
1,928.4
(573.9)
2,389.5
Working capital items
(3)
309.7
265.6
Other non-cash items
(4)
56.1
(1.1)
2,294.2
2,654.0
(204.0)
(191.1)
(173.0)
(1,131.0)
(57.3)
(1,748.1)
778.2
228.4
4.7
14.7
Total cash used in investing activities
(725.1)
(1,753.4)
Free Cash
1,569.1
900.6
Net operating Profit after tax
1,311.3
1,651.5
120%
55%
EBITDA
Net interest paid (incl. cost of Income notes)
Taxation paid
(1)
(2)
Total cash provided by operating activities
Payments for the purchase of businesses - Other
Payments for purchase of investments
Payments for normal capex
(5)
(6)
Proceeds on disposal of property plant & equipment
Dividends received
(6)
Free Cash Flow as a % of NPAT
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(7)
+17.7%
+23.9%
+15.7%
Interest paid reflects lower average debt levels in 2008.
Tax payments are proportionally higher in 2008 due to timing of tax payments.
Working capital items include further improvement in net inventory, increases in various accruals including occupancy, bonuses, utilities and increases in
provisions for employee entitlements (annual leave, long service leave & superannuation).
Non-cash items include share based payments expense, gain / loss of sale on sale of fixed assets. (2008: $34.4m gain; 2007: $12.7 m loss)
Other purchases of businesses relate to individual hotel/store acquisitions.
Reflects the acquisition of 19.9% strategic holding in ALE Property Group in 2008. 2007 reflects the 10% stake in The Warehouse Group. Dividends
received relate to The Warehouse Group.
Proceeds include monies received from sale of the distribution centres in 2008 ($82m) and 2007 ($727m).
28
Appendix 1
Five Year Store and Trading Area Analysis
Year Ended 29 June 2008
2008
2007
2006
2005
2004
FULL
FULL
FULL
FULL
FULL
YEAR
YEAR
YEAR
YEAR
YEAR
STORES (number)
NSW & ACT
234
237
238
233
234
QLD
177
168
161
147
143
VIC
187
183
182
183
179
SA & NT
72
72
69
69
63
WA
81
79
79
64
60
TAS
29
27
27
27
29
Supermarkets in Australia (1)
780
766
756
723
708
New Zealand Supermarkets (includes franchise)
201
199
198
-
-
Total Supermarkets
981
965
954
723
708
Freestanding Liquor (incl. Dan Murphy)
233
212
204
192
192
ALH Retail Liquor Outlets
434
424
432
382
-
Caltex/WOW Petrol
133
134
131
117
44
Woolworths Petrol – Australia
389
371
360
339
315
Woolworths Petrol/Convenience – New Zealand
22
22
22
-
-
2,192
2,128
2,103
1,753
1,259
BIG W
151
142
129
120
111
Dick Smith Electronics
282
254
223
202
164
Dick Smith Powerhouse
28
23
20
18
18
Tandy
106
123
123
122
148
Total Supermarket Division
Total General Merchandise Division
567
542
495
462
441
Hotels (includes 8 clubs)
271
263
250
169
-
3,030
2,933
2,848
2,384
1,700
1,945,641
1,848,792
1,784,279
1,682,536
1,623,530
Total Group
Trading Area (sqm)
Supermarkets Division – Australia (2)
Supermarkets Division – New Zealand
(3)
General Merchandise Division(4)
(1)
296,549
291,092
291,792
-
-
989,767
930,288
843,316
783,685
731,788
Supermarket Store Movements July 07 - June 08
New Stores – incremental
30
Closures - permanent
(9)
Closures – for re-development
(7)
Net New Stores
14
(2)
Australian Supermarkets Division trading area (excluding Petrol and ALH BWS outlets and
including the Australian Ex-FAL stores) has increased by:
(3)
Excludes Gull and franchise stores
(4)
Excludes Woolworths India
5.2%
FY07: 3.6%
29